ATI, the graphics division of AMD, has been aggressively delivering on price and performance for the last year with its RV770-based GPUs. These have been used in Radeon HD 4830, 4850, and 4870 video cards to steal away market share from NVIDIA.

Recently, ATI launched the Radeon HD 4890 using the RV790 GPU, a respun RV770 with a few tweaks and improvements in order to improve its position in the higher end $200+ price bracket. However, most of its sales are in the $100 category and lower price points. Today, ATI delivers a GPU to consumers at that range that NVIDIA can't match.

The Radeon HD 4770 video card that is launching today uses the RV740 GPU, which is the first 40nm GPU in mass production. The GPU consists of 826 million transistors at a core clock of 750MHz, measuring 11mm by 11mm. The Radeon 4770 features 512MB of GDDR5 DRAM clocked at 800MHz, but effectively provides 3.2 Gb/s over a 128-bit bus.

The new GPU has 640 Stream processors, the same number as the Radeon HD 4830 that it will replace. The Radeon 4830 will be quietly phased out since the Radeon 4770 offers better performance at a much lower production cost to AMD. This is offset by higher costs for GDDR5 RAM.

Smaller process geometries have led to higher possible speeds at lower power consumption. The Radeon 4770 board has a TDP of 80 watts. Costs for AMD should also drop significantly, as theoretically a lot more chips can be produced from a 300mm wafer on the 40nm process as opposed to the older 55nm process. However, yields for a new process are never as good as for an older, more mature process.

The new card requires a 6-pin PCIe power connector to operate properly. It also uses a dual slot cooler based on the reference design, although board partners like Asus and Sapphire could move quickly to provide single slot cooling solutions. Passive cooling solutions are not likely to appear.

The Radeon 4770 was orginally supposed to launch at the $99 price point. The new $110 MSRP reflects slightly higher component costs, although it is expected to move quickly to $99. Mail-in rebates are already available at some e-tailers to lower the pricing to that key number.

The main competition for the Radeon HD 4770 is NVIDIA's 9800 GT, rather than the 9800GTX+ which will continue to slug it out with the Radeon HD 4850. Our sources have told us that production of 512MB variants of the 4850 has shifted to 1GB versions. This reflects both the strength of the Radeon 4770 as well as a desire for a larger video buffer at the $130 price point.

AMD decided to bring up the launch of the Radeon HD 4770 from its original May 4th launch date, in a sign that yields are good and large numbers of cards will be available from the start. The Radeon HD 4770 is expected to be a key component in ATI's product strategy, and should be featured in many affordable PCs during the Q3 back-to-school shopping season.

The most exciting part of the Radeon HD 4770 launch really is the use of the 40nm process. As this is the first GPU to use the 40nm process in mass production, ATI can use the lessons from RV740 production to increase yields on its rumored RV870 GPU. A tweaked 40nm process will be used in the Radeon HD 5000 series launching in late Q3, which will be the first DirectX 11 parts available for use with Windows 7.